VARDHMAN CREATIONS PRIVATE LIMITED THROUGH ITS DIRECTOR SH VIRENDER KUMAR JAIN vs. INCOME TAX OFFICER

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CWP/29030/2024HC Punjab & HaryanaPHHC01145957202424 October 2024Author: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH3 pages
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What did the High Court hold?

The High Court held that instructions issued by the Board, including circulars, cannot override statutory provisions or render them obsolete. The Court affirmed the view of a coordinate bench that authorities cannot usurp legal provisions to their own satisfaction or convenience, causing hardship and confusion to assessees. Instructions and circulars are meant for supplementing statutory provisions and for their implementation. The Court found that notices issued by the JAO under Section 148 of the Act, 1961, and the proceedings initiated thereafter without conducting the faceless assessment as envisaged under Section 144B (7 & 8) of the Act, 1961, were contrary to the provisions of the Act. Consequently, the notice dated 19.03.2024 and all consequential proceedings were set aside for want of jurisdiction. The revenue was granted liberty to follow the procedure laid down under the Act, 1961, and proceed accordingly, if so advised. The writ petitions were allowed.

What were the facts?

The petitioner, Vardhman Creations Private Limited, challenged a notice dated 19.03.2024 issued by the Jurisdictional Assessing Officer under Section 148 of the Income Tax Act, 1961, and all consequential proceedings. The petitioner argued that the assessment proceedings initiated under Section 144B, which mandates faceless assessment, were contrary to the provisions of the Act. The respondent-Income Tax Department was represented by a Senior Standing Counsel. The High Court noted that similar issues had been decided by coordinate benches in other writ petitions, specifically citing Jasjit Singh vs. Union of India and Jatinder Singh Bhangu vs. Union of India. The Court was informed that both counsel were in agreement on the issue.

What were the issues?

1. Whether the faceless assessment proceedings initiated under Section 144B of the Income Tax Act, 1961, were validly conducted, considering the issuance of a notice under Section 148 and the subsequent procedural steps. Assessee's Contention: The assessee contended that the assessment proceedings initiated under Section 144B, which mandates faceless assessment, were contrary to the provisions of the Income Tax Act, 1961, and that the notice under Section 148 and consequential proceedings were liable to be set aside for want of jurisdiction. Revenue's Contention: The judgment records no specific argument for the revenue on this point, other than their counsel accepting notice and being present. However, the Court's decision implies that the revenue's position was aligned with the precedent set by coordinate benches.

Which sections of the Income-tax Act were involved?

Section 148,Section 144B,Section 119,Section 120

AI-generated summary — verify with the full judgment below

122 IN TH VARDHMAN

INCOME TAX

CORAM: H

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Present: M M

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* SANJEEV PR

1.

N

2.

M on behalf of th

3.

B present petitio No.21509 of decided on 29 2024 titled a decided on 19

C i o o HE HIGH COURT OF PUNJA CHANDIGAR

CWP-2 Date of N CREATIONS PRIVATE LIMITE V X OFFICER, WARD 1, PANIPA HON'BLE MR. JUSTICE SANJ HON'BLE MR. JUSTICE SANJ (Through Video Conferencin Mr. Divya Arora, Advocate and Mr. Amit Kaushik, Advocate, for Ms. Gauri Neo Rampal, Senior S for the respondent-Income Tax D ***** RAKASH SHARMA, J. (Oral) Notice of motion. Ms. Gauri Neo Rampal, Senior S he respondents/Income Tax Dep Both the counsel are ad idem on stands finally examined and c f 2023 titled as Jasjit Singh vs 9.07.2024, and by the Coordina as Jatinder Singh Bhangu vs. 9.07.2024. This Court in Jasjit Si “16. We are in agreement with Coordinate Bench and hold t instructions by the Board could n override statutory provisions or t obsolete. Legislative enactmen AB AND HARYANA AT RH 29030-2024 (O&M) f Decision:24.10.2024 ED

..…...Petitioner(s) V/s. T AND OTHERS

…......Respondent(s) NJEEV PRAKASH SHARMA NJAY VASHISTH ng/Hybrid Mode) r the petitioner. Standing Counsel Department Standing Counsel, accepts notice partment. that the issue involved in the concluded by this Court in CWP s. Union of India and others, ate Bench in CWP No.15745 of . Union of India and others, Singh (supra) held as under: the view taken by the that such circular or not have been issued to to make them otiose or nts having financial

) e e P , f , Suresh Kumar 2024.10.25 09:49 I attest to the accuracy and integrity of this document

CWP-29030-202

i m S S a s a t a s i 1 o s w 1 C u p f o p d 3 f 1 l A 2 o p

4.

K aforesaid term 024 (O&M) implications are required to be mandatorily. By exercising the Sections 119 and 120 of the A Section 144B (7 & 8), the a allowed to usurp the legal pro satisfaction and convenience ca assessees. It also leaves confusio taxpayers. In the opinion of th and circulars can be issued on supplementing the statutory pro implementation.

17.

In view of the aforesaid d occasion to distinguish or take suggested by the learned counse what has already been held by th

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Keeping in view the law Coordinate Bench (supra), notic under Section 148 of the proceedings initiated thereafter w faceless assessment as envisage of the Act, 1961, have been foun provisions of the Act, 1961 an dated 28.02.2023, 16.03.202 30.03.2023 and order dated 30. for want of jurisdiction.

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The respondents-revenue w liberty to follow the procedure a Act, 1961 and proceed according

20.

All the writ petitions are order passed by the Court shall present order.” Keeping in view above, we a ms. The observations and order p e followed strictly and powers contained in Act, 1961 as well as authorities cannot be ovisions to their own ausing hardship to the on in the minds of the his Court, instructions nly for the purpose of ovisions and for their discussion, there is no e a different view as el for the revenue from he Coordinate Bench. w laid down by the ces issued by the JAO Act, 1961 and the without conducting the ed under Section 144B d to be contrary to the nd accordingly notices 23, 20.03.2024 and 03.2023, are set aside would be, however, at as laid down under the gly, if so advised. allowed. The interim stand merged with the allow this Writ Petition in the passed above shall apply mutatis e s Suresh Kumar 2024.10.25 09:49 I attest to the accuracy and integrity of this document

CWP-29030-202

mutandis to (Annexure P- Income Tax A 5. A

October 24, 2 Ess Kay

Whether speak Whether Repor 024 (O&M) the present case. According -1) issued by the Jurisdictional A Act, 1961 and all consequential p All pending applications also stan [SANJEEV 2024

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king / reasoned :

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Y gly, notice dated 19.03.2024 Assessing Officer u/s 148 of the proceedings are set aside. nd disposed of accordingly.

V PRAKASH SHARMA] JUDGE

NJAY VASHISTH] JUDGE Yes / No Yes / No 4 e Suresh Kumar 2024.10.25 09:49 I attest to the accuracy and integrity of this document

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